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Mid-Day seals Jagran Prakashan deal with 7:2 swap ratio
Jagran Prakashan will issue two shares of for every seven of Mid-Day. The Mid-Day deal is valued around Rs 175 crore at the current market price, Jagran stated.
The board of Mid-Day Multimedia on Tuesday approved demerger of its print business and okayed transferring it to Jagran Prakashan with effect from April 1, 2010. The Print business of Mid-Day Multimedia is run through its wholly owned subsidiary Mid-Day Infomedia Ltd (MIL), which has publication brands like the Mid-Day.
Confirming this news, RK Agarwal, CFO, Jagran Prakashan told CNBC-TV18 that there is no cash outgo in the deal. As per the deal, for every 7 shares of Mid-Day Multimedia, its shareholders would get 2 shares on Jagran. Elaborating on the mechanics of share swapping, investment advisor SP Tulsian said it has been worked out on present market price. He said by multiplying 3.5 with Rs 33.50 (Miday current market price) you get Rs 115, (Jagran's current market price). The deal, Agarwal said, would result in an equity dilution of 4.9%.
